About One Person Company

A One Person Company (OPC) is a type of company structure that allows a single individual to own and operate a corporate entity. This concept, introduced in many countries to encourage entrepreneurship, enables individuals to enjoy the benefits of limited liability without needing a partner. An OPC is a hybrid structure, combining features of a sole proprietorship with those of a private limited company, offering the flexibility of business operations and the protection of personal assets.

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Definition and Legal Framework:

1. Definition:

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  An OPC is described as a business entity with just one individual as a member according to the Companies Act.
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  The sole individuals belonging to the organization are the shareholders and subscribers of the Company’s Memorandum of Association.

2. Nature:

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  A company with a single shareholder as a member is known as an OPC.
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  Registration of One Person Companies (OPCs) allows integrating microbusinesses and realizing entrepreneurial dreams by overcoming constraints on time, money, and media.

3. Comparison:

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  OPC is sometimes referred to as a company combined with a sole proprietorship.
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  Because Section 2(62) of the Companies Act 2013 and its implementing regulations permit OPC to be registered as a one-person company.

4. Reason for OPC:

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  The business idea can be readily transformed by an individual into a corporate structure.
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  Restricted responsibility and minimal complications compared to having multiple partners.
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  Limited liability strengthens the incorporation of OPCs.

Advantages and Requirements:

1. Advantages:

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  A member is liable only for the company’s debts up to the amount of their ownership stake, protecting personal assets beyond their investment.
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  A person company is a distinct legal entity with its own autonomous existence, separate from its owners.
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  Rent, interest, and directors’ compensation are deductible expenses that reduce taxable income, resulting in a lower tax burden.
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  Decisions can be made quickly since the business is solely owned and operated by one individual.

2. Requirements:

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  The OPC’s Nominee and the Person Incorporating It shall be a Natural Individual, a National of India, and a Citizen of India.
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  Individuals are not permitted to incorporate more than one OPC.
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  No Individual may be nominated in more than one OPC.
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  If an individual is called a member of one OPC and joins another as a nominee, they must comply within 180 days.

3. Capital Requirements:

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  A minimum Authorized Capital of Rs. 1 lakh  can be used to establish OPC
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  There is no minimum paid-up capital required, and a capital contribution as low as Rs. 2 is sufficient to start.

4. Conversion Conditions:

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  OPC must become a Private Limited Company if its paid-up capital surpasses Rs. 50 lakh or its average turnover for three straight years reaches Rs. 2 crores or more.
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  Section 8 of the Act prohibits the incorporation or conversion of OPCs into companies engaging in non-banking financial investment activities.
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  OPC must convert into a Private or Public Company within six months if paid-up capital rises above Rs. 50 lakh or the average annual turnover of the company exceeds Rs. 2 crores.

Incorporation Process:

1. Documents Needed:

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  PAN cards self-attested by members and directors.
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  Generally, you need some Self-attested identification documents (valid driver’s license, passport, voter ID, or Aadhar card).
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  Additionally, you need Self-attested address proof (bank statement, electricity bill, phone bill, or mobile bill not older than two months)
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  Passport-size photos (2×2) of directors and members.
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  Proof of business address (NOC from property owner, property documents, utility bill not older than two months).

2. Information Needed:

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  The proposed company’s authorized and paid-up share capital.
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  Birthplace and length of stay of the director nominee and sole member at their current residential address.
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  Role and educational requirements of the director nominee and sole member.
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  Email addresses and phone numbers of the director nominee and sole member.

Jaipur OPC Registration Process:

1. Obtaining Digital Signatures:

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  Obtain digital signatures for the OPC and proposed members.

2. Name Reservation Application:

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  You should apply for name reservation using web services (SPICe+) at www.mca.gov.in and pay applicable fees.
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  Confirm name availability on MCA and ensure it is not already registered as a trademark or another name under the class of work.

3. Completing SPICe+ Part B:

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  Complete Part B of SPICe+ for registering the company.
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  Attach required documents including director’s agreement, PAN, voter ID, bank statement, utility bill, and NOC from property owner.

4. Converting SPICe+ Form to PDF:

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  Convert the SPICe+ form to PDF format to attach the DSC.

5. Filling AGILE-PRO:

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  Fill AGILE-PRO form which includes a general ESIC and EPFO registration along with mandatory bank account opening, and accessibility to GSTIN.

6. Uploading Forms on MCA:

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  Upload forms to the Ministry of Corporate Affairs once the DSC has been attached.

FAQ’s

What Is OPC?

In simple words A single-member business company as defined by the Companies Act of 2013. 

What conditions should be fulfilled in order to establish an OPC?

 The minimum authorized capital is Rs. 1 lakh and the individual must be a resident of India and a single natural person.

What benefits can one expect from an OPC?

Faster decision-making reduced tax burden independent legal existence and limited liability. 

Is it possible to change an OPC into a different kind of company?

 It has to be true that an OPC that has paid-up capital exceeding Rs. 50 lakh or average turnover exceeding Rs. 2 crore is required to convert to a Private or Public Limited Company.

What paperwork is required for an OPC registration?

Self-attested PAN card proof of identity and address passport-size photos and evidence of business address.